Article / 21 January 2015 at 6:44 GMT

Australian Market Wrap: Gold miners shine ahead of ECB statement

Trading Desk / Saxo Capital Markets
Australia
  • Materials led the way with Rio Tinto up 2.61% and BHP Billiton rising 2.07%
  • AUDUSD is expected to trade within the range of 0.8210 and 0.8130.
  • Goldminer Newcrest surged 4.09% in the lead up to the ECB’s announcement

By Saxo Capital Markets Australia

The markets cheered today enjoying the best positive move so far this year: The S&P/ASX200 or the XJO Index rallied 85.73 points or 1.62% to close at 5393.4. We are now down only 18 points for the year after today's gains.

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All sectors finished positive with materials leading the way up 2.29%: Rio Tinto rallied AUD1.40 or 2.61% to AUD55.09 and BHP Billiton rose 57 cents or 2.07% to AUD28.05. Fortescue Metals was the stand out loser closing down 1 cent to AUD2.32.

Leading our winners for today was Echo Entertainment (EGP) up 6.02% to AUD3.70. AUD3.50 was a big level of support for EGP two years ago and after recently been tested, should now be considered the new floor.

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 Gold touched $1300, thriving amidst European uncertainty. Photo: Thinkstock

Unsurprisingly, Newcrest Mining (NCM) surged 4.09% to AUD13.74 in the lead up to the ECB’s announcement as uncertainty remains around the outcome. Gold has now just touched $1,300 an ounce for the first time since August. Today’s losers were unquestionably lead by Metcash (MTS) which shed 2.32% to AUD1.475. MTS has had a horrible three months, down 50% over the period.

The AUD still continues to trade sideways without clear direction as traders await tomorrow’s big decision regarding the European Central Bank's QE program. AUDUSD is expected to trade within the relatively narrow ranges of 0.8210 and 0.8130. The key support level is at 0.8065 and the resistance level 0.8250.

The SPI recorded its strongest gain for the year after banks and miners rallied on a bullish sentiment as hopes build of further monetary easing in Europe. It rallied 100 points after finding a bottom at the support level 5,250, while the next resistance level is at 5,422 which could be tested should the current buying momentum continues on.

-- Edited by Adam Courtenay

Aussie Market Wrap is compiled by the Sydney trading desk at
Saxo Capital Markets
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